Mary C. Daly’s Post

As we close out the year, I want to make clear that I am resolute in achieving our dual mandate goals. While the economy is in a good place and progress has been made towards bringing inflation down to target, the job is not yet done. This week’s interest rate cut was a close call for me and ultimately, I supported it in order to recalibrate policy. Now that the recalibration phase is behind us, the next phase is really about looking at the incoming information and proceeding cautiously. We can return to a more gradual and cautious approach to monetary policy, where we watch the data carefully, assess, and discuss at the FOMC. I see monetary policy in a position now that is restrictive, and it will continue to bring inflation down in a way that doesn’t strangle the labor market. While the path ahead is uncertain, as a monetary policymaker, it is something that I am used to. In the face of uncertainty, I remain agile and continue to think about the economy we need for the American people. I joined Bloomberg Surveillance this morning and discussed the economy, inflation, and where I see monetary policy headed next year. 

What Secrets Lie Behind Federal Reserve Decisions ❓ Hi there, Understanding Federal Reserve decisions is crucial for investors. Let's explore recent actions and their impact on interest rates, inflation, and market sentiment. 🔆 1. Recent Federal Reserve Decisions** 🔆 Interest Rate Hike: The Fed increased the benchmark interest rate by 0.25% to combat rising inflation, marking the third hike this year. 🔆 Impact: Higher rates make borrowing more expensive, potentially slowing consumer spending and business investment. 🔆 2. Inflation Control Measures 🔆 Quantitative Tightening (QT): The Fed is reducing its balance sheet by selling bonds to decrease the money supply and curb inflation. 🔆 Impact: QT leads to higher long-term interest rates and lower bond prices, balancing inflation control with economic growth. 🔆 3. Market Sentiment 🔷 Investor Reaction: Mixed reactions with some viewing the measures as necessary, while others fear economic slowdown. 🔷 Impact: Stock market volatility, especially in sectors like technology and consumer goods. 🔷 Future Outlook 🔷 Economic Projections: The Fed’s cautious, data-driven approach will depend on employment rates and GDP growth. 🔷 Impact: Investors should stay informed and consider diversifying portfolios to hedge against interest rate risks. ##Wealth management ##Financial freedom ##Forex trading ##Crypto trading ##European financial trading ##American financial trading Conclusion The Federal Reserve’s recent policies aim to balance inflation control with economic growth. Staying informed can help investors navigate the financial landscape effectively. Stay tuned for my next post, where I will discuss strategies to protect your investments during economic downturns. Yours truly, Blessings, Tommy

The Federal Reserve's recent decision to cut interest rates has sent ripples through financial markets. This bold move, driven by concerns about a slowing job market and inflation pressures, could have significant implications for the economy. Key Takeaways: * Lower borrowing costs: Reduced interest rates can make it cheaper to borrow money, stimulating consumer spending and business investment. * Potential for a soft landing: This move could help the economy avoid a deep recession while still controlling inflation. * Market reactions: Global markets have generally responded positively, though there are still concerns about recession risks. Historical context: While rate cuts often lead to market rallies, the impact can vary depending on the economic climate. Previous cuts have shown mixed results, but given the current conditions, there is optimism that this one could be beneficial. #Fed #interest rates #economy #market

Dr. Torsten Slok is one of the best macroeconomic analysts working on Wall Street. His reports and commentaries are always worth a look. Here, he presents his U.S. 2025 outlook. Slok differs from some of his peers in seeing little room for the Federal Reserve to further slash interest rates because of 1) sticky inflation, 2) enormous structural U.S. government deficits that will lead to epic volumes of bond issuance plus trillions more in debt rollovers, and 3) the inflationary impulses built into President-elect Trump's policy agenda. He also notes that interest rate increases implemented by the Fed in 2022-23 appear to have done little to cool the U.S. economy or to dampen overall consumption spending (which accounts for over 70% of GDP). This speaks to the resilience of the American economy as well as to the fact that it is less sensitive to interest rate increases than in the past.

For decades, financial professionals have leveraged commentary from the Federal Reserve to forecast the trajectory of the federal funds target rate. This practice became especially significant starting in the 1980s and has served as a crucial tool for understanding potential monetary policy shifts. Recently, however, there appears to be a divergence between the Fed's projections and market anticipations. Despite the Federal Reserve's earlier signals suggesting up to three rate cuts this year, market consensus now forecasts a more conservative approach—potentially a single rate cut towards the end of this year or early next year. This disparity raises important questions about the reliability of central bank communications in today's complex economic landscape. How is the equity market responding to what some might perceive as an overly optimistic Federal Reserve? Recent trends indicate that equities are discounting these projections. As we continue to receive strong economic data and witness resilient consumer spending, alongside escalating tensions in the Middle East, the markets seem to be recalibrating their expectations. Adding to the complexity, the Q1 GDP for 2024 has been reported at 1.6%, a decrease from 3.4% in Q4 2023, hinting at a slowing economy. Conversely, the Q1 PCE has surged to 3.7% from 2% in the previous quarter, signaling robust consumer spending—factors that contribute to investor anxiety regarding potential delays in the anticipated rate cuts. How are you adapting your investment approach in response to these evolving economic signals? #FederalReserve #InterestRates #MarketAnalysis #EconomicIndicators #InvestmentStrategy

In a much-anticipated move after many months of speculation, the United States Federal Reserve Bank finally cut its interest rates by a considerable 5% to stand at a target range of 4.75% to 5%. As we explained in our recent Global Compass on interest rate volatility (Access here: https://lnkd.in/eXR7tbqx), this change in the price of borrowing money will have implications for business leaders and the overall economy across different sectors. The Fed’s Chair Jerome Powell made this decision as part of ongoing efforts to strike a balancing act between bringing inflation back to the overall target of 2% (currently standing at 2.5%) and ensuring job creation regains momentum to avoid unemployment levels from going up.   As we observed in previous updates, the US announcement comes after other countries’ central banks moved in the same direction, including major G7 markets including the United Kingdom and Canada. Economists and the Fed expect – all other things equal – to make further cuts in the coming quarters to continue stimulating the economy while avoiding a replication of the 2009-2016 and 2020-2022 periods where interest rates were cut to 0%.   Going forward, we should expect other central banks that were waiting on the Fed’s cue to move in the same trajectory of travel and start cutting rates. However, collective leaders should not expect the return of “easy money” that characterized last decade, which was itself driven by an economic recovery from the 2007-8 financial crisis. Jerome Powell’s remarks yesterday underscored that “we are probably not going back to that era where there were trillions of dollars of sovereign bonds trading at negative rates”. His words corroborate the findings from our Global Compass and provide excellent context from which to browse our updated PulsePoint (Access here: https://lnkd.in/e2sib5EB). Business leaders should closely follow developments in this space as they calibrate their strategies for the coming year. The global landscape is still fragmented: other players who play a decisive role in global governance, including Japan, raised interest rates just over a month ago. Ibec Jackie King #GlobalBusiness #InterestRates #Fed

The Federal Reserve has taken a big step by easing rates, but the effects on the #USeconomy and job market are still unfolding. Evgeniy Yashin, CFA® breaks down what investors should keep in mind as they navigate these shifting dynamics. Don’t miss the latest #MarketOutlook! https://lnkd.in/ejvfXR5V